To simultaneously deal with low-volatility, resource-rich settings and high-volatility, resource-constrained settings, companies need two sets of innovation capabilities: the structured capability, with its volume-oriented economies of scale, hard capital, and efficiency, and the jugaad capability, with its value-oriented economies of scope, soft capital, and flexibility. Mature companies that strike this innovation balance will be better positioned for success in today’s complex, turbulent markets.
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- Navi Radjou is a Silicon Valley–based strategy consultant, a World Economic Forum faculty member, and a fellow at the University of Cambridge’s Judge Business School.
- Jaideep Prabhu is the Jawaharlal Nehru Professor of Indian Business and Enterprise and director of the Centre for India & Global Business at the University of Cambridge’s Judge Business School.
- Simone Ahuja is the founder of Blood Orange, a marketing and strategy consultancy with content production capabilities headquartered in Minneapolis and Mumbai.
- This article is adapted from the authors’ book, Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth (Jossey-Bass, 2012).